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MEETING WITH SIR Y K PAO:
ESSENTIAL FACTS
SHIPBUILDING
1. In January Sir Y K Pao's World Wide Shipping Group (World's
largest independent shipping company) placed a £20 million order for
four general cargo ships with British Shipbuilders' subsidiary,
Austin & Pickersgill Ltd. First order that World Wide have placed with
a UK yard since early 1970s. Order was most welcome and has attracted
personal interest of Prime Minister.
2. Since 1960's Sir Y K Pao's company has obtained majority of its
new vessels from Japanese yards. Two main reasons for this. First,
Japanese shipbuilders can offer prices and deliveries which those in UK
can not match. Second, World Wide's normal policy has been to order
ships only against specific long term charter commitments by third
parties, and Japanese companies have been more prepared than most others
to accept this arrangement. Long-term charter deals have also
enabled World Wide to weather shipping recession better than most
competitors.
3. Sir Y K Pao has said that he would like to arrange similar charter
deals in the UK, eg with British Steel. Discussions have taken place
but British Shipbuilders have been unable to attract sufficient
interest in this charter concept.
4. Price and delivery are important factors in World Wide's ordering
policy. Although HMG is, in principle, prepared to make available
Intervention Fund grants to help shipyards quote more competitive
prices, question of delivery is a matter for shipbuilders.
JOINT VENTURES
5. World Wide Shipping Group, backed by Hongkong and Shanghai Bank
and Industrial Bank of Japan, reached agreement with Chinese in March.
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/1980
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